Paying off your credit card can seem like a big ask. But often, all you need is a plan. Check out these seven simple hacks to help you deal to your debt.
1. Pay more than the minimum amount
It sounds obvious, right? But many people just pay the minimum payment due amount on their monthly credit card statement without even thinking about it. If you only pay the minimum amount, you’ll have to pay more interest – potentially increasing your debt.
If you can, always pay more than the minimum payment due amount. Every little bit counts because it will not only reduce the amount you owe; it will also reduce the amount of interest you pay.
2. Give your credit card a holiday
Giving your card a holiday can be a great way to help recharge your finances. If you can, stop using it for a while (at least until you’ve paid it off). If you keep spending on your credit card while you’re trying to pay it off, you’ll probably pay more in interest and take longer to get debt-free.
Another idea is to only carry your debit card. That way, if you need to buy something you’re buying it with your own money so you’ll avoid paying credit interest.
Add a new item to your trusty budget and call it ‘monthly credit card payment’, or ‘debt destruction’, or whatever works for you. Locking it in to your budget helps you stay on track. The amount? Check the rest of your budget and see how much you could pay. To keep your budget in balance, you may need to cut spending in other areas, so take a deep breath and have a look at where you could make savings. Remember, the more you can repay regularly, the less interest you’ll be charged and the faster you’ll have it all paid off.
Consider setting up a direct debit or automatic payment for your credit card repayments. That way, you can set it to make sure you never miss a repayment (which could incur fees and interest). You could also set up an alert via Internet Banking or the ANZ goMoney app so you receive an email or text reminding you when your credit card payment is due.
If you’re an ANZ customer you can set up automatic payments for no fee in ANZ goMoney or Internet Banking. To set up a direct debit, call us on 0800 658 044.
If you have savings, you could consider using some to reduce your credit card balance. Why? Because you’re probably paying more interest on your credit card balance than you’re earning on your savings. Whether this is right for you depends on your particular situation though, so if you’re considering this we recommend you seek independent financial advice.
6. Shifting the balance
Many credit card providers offer balance transfers (a special interest rate for a certain period if you transfer the balance from another provider’s card to one of theirs). This can be a good way to save on interest costs (although the interest rate typically reverts to the standard rate after a promotional period).
It’s important to keep up with your credit card repayments to avoid unnecessary additional fees and interest. But everyone goes through tough times now and then, so if you’re worried about your credit card debt or your ability to make repayments, contact your credit card provider. They may be able to assist with tools, resources or different payment solutions to help relieve any financial stress.
If you’re an ANZ customer having difficulty making your credit card repayments, please contact us on 0800 240 438 to see how we may be able to help.
Information in this article refers to personal credit cards, is general in nature only and does not take into account your personal objectives, financial situation or needs.The information may not reflect how interest and charges are calculated under your credit card conditions of use.
By providing this information ANZ does not intend to provide any financial advice or other advice or recommendations. You should seek independent financial, legal, tax and other relevant advice having regard to your particular circumstances.
The information is current as at December 2019 and may be subject to change. ANZ recommends you review your personal credit card conditions of use for information about the terms that apply to you.